Charlotte J.

Pelayo

What I have learned in this class is that when it comes to business loans there are some
processes that needs to be implemented such as making policies in every corporation. In Lending
company or businesses by considering the loan process from the lender’s perspective and the
understanding of what they are looking for is that you’ll know exactly what you need to do to be
able to increase the chances of being approved for a business loan, and the 5c’s of Credit is the
best way to stabilize the Lending Company or business. The first one is the Character, in which
Character refers to a business reputation and trustworthiness its also called “credit history,” or
background history. The second is the Capacity in which the capacity is the business ability to
pay back the loans of the borrowers it is called cash flow, and it is directly related to how much
cash of the business is available for loan to use. The third is that Capital refers to how much
money of the borrowers and the partner of borrowers have invested in the company, the purpose
of this is that the more money you personally have invested in your business, the less likely you
are able to experience default on your loans because the lenders see capital investments as a sign
that you take your business seriously, and have something to lose if the business goes under risk.
The Fourth is that the Conditions such as interest rate is an important impact in either you can
and can’t afford the loan and how big that loan can be. And lastly is the Collateral in which the
assets that are offered up in insurance against you paying back your loan fully and on time. If
you default on your loan, lenders will seize the collateral in order to make up for their losses.
These are the factors that can make the lending company implement a good business.